For those unwilling to accept any meaningful execution risk on their FX trades, trading on a risk transfer price with a dealer is the way to go – but there can still be a place for algos.
Despite broad acceptance that they introduce a measure of execution risk, as noted by a recent Bank for International Settlements (BIS) markets committee report titled FX Execution Algorithms and Market Functioning, market participants often reckon this downside is comfortably outweighed by the benefits.
Execution algos provide traders with more direct control & parameterization of their execution
Daniel Chambers, BidFX
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